NZD/USD Has Been Consolidating for Seven Months at the Historical Low

The last time the pair visited these levels in August 2009 and in May and June 2010.

When you look at the shorter time-frames (in this case the weekly and the daily ones), you see that the pair is consolidating at the support at 0.63 and it’s forming a flag. Usually that means that the trend, in this case a bearish trend, will continue.

We do have to keep in mind that we’re at a historical low and consider the other possibility – that it may start rising instead.

The doji candlestick for September 2015 visible on the monthly time-frame supports the latter scenario, not to mention that the pair hasn’t formed a new low since then.

It's possible the current consolidation to last another month or two until the pair reaches the middle line of Bollinger Bands on the monthly time frame, after which it may fall to the trendline on the screenshot, where it will likely find very strong support on the monthly time-frame.

As we know, the longer a consolidation lasts, the more impressive the movement will be once it ends. So, while we trade on the shorter time-frames we have to watch the pair closely so we can be sure we’ll be able to trade the powerful movement that has to begin sooner or later.